South African internet micro-jobbing service Money for Jam (M4JAM) has ceased trading after failing to make a profit, the company’s CEO Andre Hugo has told Fin24.
M4JAM was launched in 2014 on instant messaging service WeChat and it enabled users to perform ‘micro-jobs’ to earn money.
The M4JAM business model was further based on taking a licence fee from clients on every successful completed job.
The startup’s representatives told Fin24 last year that the service surpassed 70 000 users.
WeChat Africa, a Naspers and Tencent joint-venture, also invested into the social jobbing platform.
But despite these developments, M4JAM still ran into problems and it issued a notice to its users on Monday that urged them to cash out before March 31.
“M4JAM was unable to achieve profitability within the investment time frame,” Hugo told Fin24 via an email response.
“As a result the board has decided to cease trading and sell the assets to interested parties over the course of the next month.
“We are in the process of meeting with a number of interested parties currently. If we are successful the business will be restructured. If not the business will be closed. Therefore we are urging jobbers to cash out their wallet balances,” he said.
The risk that M4JAM could shut down permanently is also a possibility, Hugo said.
“Yes this is a real possibility if we are not able to find additional investors before the end of the month,” he said.
“While WeChat Africa is willing to make select early stage equity investments into promising startups with potentially interesting use-cases for the WeChat Africa platform, WeChat Africa is not a venture capital fund that can provide multiple rounds of equity funding to portfolio companies,” Hugo told Fin24.
It’s unclear as to when exactly M4JAM started to experience financial problems as Hugo last year told Fin24 that the business was “profitable from day one”.
In the meantime, job listings on M4JAM’s WeChat app have also been taken down with a message on several pages in the app saying “there are no campaigns with jobs available for you.”
Hugo told Fin24 that “corporates who have posted jobs will be refunded for unfulfilled jobs at the date of closure.”